Safe investment options in India

It’s important to preserve money in a way that can be used in the times of emergencies. However, question arises that in such a horde of options today which are the safe investment options in India?

In this article, I present to you the 6 safe investment options in India which will help you select from credible options where you’re assured that your money will remain safe and earn good returns in a period of time.

Safe investment options in India | Checking accounts

Checking accounts facilitate the ease of withdrawal & deposit of cash. However, these accounts don’t give you any significant interest. Therefore, it’s not a viable option to preserve your money for short term transactions. However, they are very convenient when it comes to depositing & writing checks, gaining access to ATMs & automatic transactions such as payment of bills. Some checking accounts demand certain fees & minimum balance requirements. Hence, you should keep in mind all these factors before you open a checking account.

Safe investment options in India | Savings accounts

Savings accounts give greater returns than checking accounts. However, savings accounts offer lower rate of returns. Savings account is a secure place to preserve your money temporarily. It can also be used in parallel with your checking account to manage your basic personal finances.

Safe investment options in India | Money market accounts

Banks or other brokerages usually manage these money market accounts. Therefore, they are convenient if you want to preserve money for future investment decisions. However, don’t expect sizeable returns because the returns are fairly low. In terms of services, these accounts offer similar services like the checking accounts. However, there are limited transaction facilities unlike checking accounts.

Safe investment options in India | Money market funds

Money market funds signify investment options which are highly liquid & offer marginally greater returns than the previous options. Brokers manage such funds. Money market funds are utilized to preserve money which is currently not invested. Money market funds are not FDIC insured unlike the bank accounts & money market accounts. However, the risk is very low.

Safe investment options in India | Investing In Gold

Gold is considered as a perfect hedge against inflation. However, in regards to absolute returns, gold displayed returns of only 0.8% above inflation. When you compare this with returns from real estate & shares, they beat gold in terms of capital appreciation. Real estate & shares displayed returns of about 11% over inflation since 1979 when Sensex was launched.

However, investment in gold is a good option when you consider it from a short term point of view compared to the share market which is highly volatile. It is advisable to allocate up to 5% of your overall investment portfolio for gold investments.

We hardly observe a case of deflation in India. Therefore, there are no major risk factors associated with gold. Last year official figures showed negative inflation (deflation). However, the actual costs of food products were on the rise. Gold prices also reflected the same trend.